Canadian economy ‘puffing along’

OTTAWA — Canada’s export market isn’t broken, just bruised — and consumers aren’t spent out, it’s just that the country can’t afford to rely on them to keep growing the economy much longer. The remedy? A sustained recovery in the United States, mixed with a strong dose of optimism for other advanced countries, such as Japan and those onthe-mend eurozone members.

That’s the prescription being offered by TD Economics in its quarterly assessment of Canada and the U.S. and the global economy as a whole.

“Economists i n Canada are guilty of sounding like broken records, repeating the need for Canada’s growth to shift from relying on heavily indebted consumers to stronger exports and business investment,” TD said Wednesday.

“While the process has started,U.S.economicgrowth looks slightly softer in the near term, making the transition uneven,” it said.

“In the meantime, the consumer and the housing market have shown more momentum, helping to keep the economy puffing along until next year — when exports drive growth fast enough to start absorbing more of the excess capacity that persists in Canada’s economy,” said TD forecasters, led by chief economist Craig Alexander.

“The transition to more export-led growth is still forecast, only delayed,” they said.

“Consumer spending and residential investment have entered the second half of 2013 displaying more momentum than had been anticipated in our June outlook. … Elevated household indebtedness and higher interest rates should still lead these areas to slow next year.”